Printer Friendly

HOUSE OF FABRICS REPORTS THIRD QUARTER FINANCIAL RESULTS

 SHERMAN OAKS, Calif., Dec. 1 ~PRNewswire~ -- House of Fabrics Inc. (NYSE: HF) experienced a substantial decrease in third quarter net income because of a greatly increased level of markdowns and promotional activity in a highly competitive retail fabrics industry.
 Net income for the quarter amounted to $1,138,000, equal to
8 cents per share before a non-recurring item. A one-time charge of $619,000, before tax, which reduced net income per share by 3 cents, was taken during the quarter to cover the cost of a reduction in force in administrative personnel. After giving effect to this item, net income for the third quarter was $758,000, equal to 5 cents per share, compared with $6,422,000, or 43 cents per share, in the prior year. Third quarter sales totaled $146,843,000, compared with $140,443,000 a year ago.
 Average shares outstanding were 13,923,269 in this year's third quarter and 14,988,894 in the corresponding quarter of the prior year.
 For the nine months, net income was $2,994,000, equal to 21 cents per share, including the previously mentioned non-recurring item, vs. $11,345,000, or 86 cents per share, in the previous year. Sales for the period were $399,776,000, compared with $339,763,000 one year earlier.
 Gary L. Larkins, president and chief executive officer, said: "We've taken a proactive approach to the present difficult operating climate for the industry which has been characterized by sluggish sales and intense competition. The company has moved to lower expenses, reduce inventory and slow the pace of its expansion~superstore conversion program. In an action that was painful but necessary, we cut corporate overhead by 13 percent. Going forward, this expense reduction will produce a benefit of approximately $1 million on an annual basis.
 "As we entered the quarter, we felt that our inventory was too high in relation to anticipated sales levels in the present economy and took aggressive promotional markdowns to move the goods. While gross margin decreased significantly as we anticipated, we were successful in reducing inventories by $8 million.
 "With respect to the conversion of our operations to the large superstore format, we opened 27 new superstores during the third quarter and closed 10 older locations. Through the first nine months of the year, 70 new superstores were opened or acquired while 46 older locations were closed. It is anticipated that we will open 85 new superstores for the full fiscal year. Currently, the company operates 535 superstores and 158 mall-based units.
 "Looking ahead, however, we've moderated our expansion pace to maintain careful control of growth in the present challenging retailing environment. At the same time, we remain fully committed to our conversion program, believing that the advantages of the larger store format have been amply demonstrated over the past seven years."
 Larkins concluded: "During the fourth quarter, we expect to be completing our inventory reduction~markdown activity. While net income will be less than last year's record fourth quarter when we earned 56 cents per share, we anticipate improvement from the level of the quarter just concluded. For the longer term, the steps that we are currently taking will place the company in a strong position to achieve our primary objective of improving profitability."
 House of Fabrics Inc. is one of the nation's leading chains of company-owned and operated retail fabric stores with 693 currently in operation.
 HOUSE OF FABRICS INC.
 Summary of Consolidated Operations
 (Unaudited)
 Three Months Ended Oct. 31,
 1992 1991
 Sales $146,843,000 $140,443,000
 Expenses
 Cost of sales $81,232,000 $70,953,000
 Selling, general & admin. $62,448,000 $57,304,000
 Operating profit $3,163,000 $12,186,000
 Interest expense $1,414,000 $1,407,000
 Intangibles amortization $316,000 $306,000
 Income before income taxes $1,433,000(a) $10,473,000
 Income taxes $675,000 $4,051,000
 Net income $758,000(a) $6,422,000
 Net income per share $0.05(a) $0.43
 Average shares outstanding 13,923,269 14,988,894
 Nine Months Ended Oct. 31,
 1992 1991
 Sales $399,776,000 $339,763,000
 Expenses
 Cost of sales $210,979,000 $171,365,000
 Selling, general & admin. $178,267,000 $146,354,000
 Operating profit $10,530,000 $22,044,000
 Interest expense $4,082,000 $2,991,000
 Intangibles amortization $965,000 $356,000
 Income before income taxes $5,483,000(a) $18,697,000
 Income taxes $2,489,000 $7,352,000
 Net income $2,994,000(a) $11,345,000
 Net income per share $0.21(a) $0.86
 Average shares outstanding 14,013,189 13,258,318
 (a) Includes a non-recurring pre-tax charge of $619,000 to cover the costs of a reduction in administrative personnel which lowered earnings by 3 cents per share.
 HOUSE OF FABRICS INC.
 Summary Balance Sheet Information
 (Unaudited)
 Oct. 31, 1992 July 31, 1992
 Inventories $269,906,000 $278,396,000
 Property - net $67,621,000 $62,043,000
 Total assets $397,826,000 $398,770,000
 Bank debt $101,490,000 $113,290,000
 Other liabilities $119,197,000 $109,153,000
 Total liabilities $220,687,000 $222,443,000
 Shareholders' equity $177,139,000 $176,327,000
 -0- 12~1~92
 ~CONTACT: Gary L. Larkins, president of House of Fabrics, 818-995-7000~
 (HF)


CO: House of Fabrics ST: California IN: TEX SU: ERN

MS-LS -- LA014 -- 2250 12~01~92 08:34 EST
COPYRIGHT 1992 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1992 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Nov 25, 1992
Words:910
Previous Article:GEODYNAMICS CORP. ANNOUNCES SECOND QUARTER DIVIDEND
Next Article:INFORMIX TAPS ATRIA SOFTWARE TO PROVIDE SOFTWARE DEVELOPMENT TECHNOLOGY; ATRIA SIGNS INFORMIX TO WORLDWIDE MULTI-YEAR CONTRACT
Topics:


Related Articles
HOUSE OF FABRICS HAS RECORD THIRD QUARTER AND FIRST NINE MONTHS OF ITS FISCAL YEAR
CONE MILLS CORPORATION ANNOUNCES INCREASES IN SALES & EARNINGS FOR THIRD QUARTER 1993
CULP REPORTS RECORD THIRD QUARTER RESULTS EARNINGS MORE THAN DOUBLE ON 40% GAIN IN SALES
CONE MILLS CORPORATION REPORTS THIRD QUARTER RESULTS
HOUSE OF FABRICS REPORTS THIRD-QUARTER RESULTS
CULP REPORTS HIGHER QUARTERLY SALES AND EARNINGS EARNINGS PER SHARE UP 43% FOR FIRST NINE MONTHS OF FISCAL 1995
CONE MILLS REPORTS RECORD SALES, LOWER MARGINS
ALLIS-CHALMERS CORPORATION REPORTS RESULTS
CULP REPORTS 15% HIGHER THIRD QUARTER NET INCOME NINE-MONTHS RESULTS REFLECT INCREASED SALES AND EARNINGS
Guilford Mills Announces Earnings

Terms of use | Copyright © 2017 Farlex, Inc. | Feedback | For webmasters